Petal Raises $13 Million to Design a Credit Card for People Without Credit Scores
You are here

Petal Raises $13 Million to Design a Credit Card for People Without Credit Scores

Petal Raises 13 Million to Design a Credit Card for People Without Credit Scores

Fintech startup, Petal, has raised $13 million in a new series A round of funding led by Peter Thiel’s Valar Ventures. Other participating investors include Third Prime Capital, RiverPark Ventures, The Social Entrepreneurs’ Fund, Brooklyn Bridge Ventures, Afore Capital, Rosecliff Ventures, Great Oaks Venture Capital, New Ground Ventures, Abstract Ventures, Ride Ventures, Story Ventures, and The Gramercy Fund.

Founded in New York in 2015, Petal is on a mission to provide an alternative credit card that does not rely on traditional credit scores for consumers to qualify. This may be particularly appealing to younger users who have yet to build a sufficient credit rating, and those who are planning to start a new business while working.

Using a process known as cashflow underwriting to analyze an individual’s full digital financial record, the platform assesses the money that users earn and save, alongside the users’ expenses, to determine creditworthiness.

“There’s a tremendous need for access to affordable credit if you’re brand new to credit,” says co-founder and CEO Jason Gross. “Something is terribly wrong when the industry decides an entire generation is sub-prime. Today’s credit system unfairly labels young Americans and other new-to-credit borrowers as ‘high-risk’ then punishes them with high interest rates and excessive fees. Petal breaks that cycle, using technology to give tens of millions of people the credit they deserve.”

A credit limit can be set between $500 and $10,000, with a typical interest rate between 14% and 25%, though no interest applies if the bill is settled each month. Petal launched its “no-fee” credit card on an early-access program in September, alongside a mobile app designed to help users manage their credit card through reminders and automated payments.  Petal also allows users to decide what they would like to pay in a given month, and then shows them how much the interest will cost them.

Megha Shah
Megha Shah
A dreamer, traveler, aspiring entrepreneur and a bookworm beyond repair, Megha Shah is extremely fond of writing and has been doing so since she was a child. Apart from being a part-time writer, Megha is currently in college, pursuing B. Com. (Hons). Megha is an ardent follower of ‘Hardship, Hustle and Heart’ and firmly believes in the power of hard work and destiny!

Leave a Reply

Top
Want to stay up-to-date with news and information from TechFunnel.com?

Subscribe Now